It is becoming increasingly clear that the days of candidates choosing a job based on salary alone are over. They are beginning to look at what else a company can offer that may add value to their lives. An employee benefits package happens to be just one of these things.
A strong employee benefits package includes benefits that truly aid employees, like assistance with childcare costs and retirement savings. This can make an employee’s life easier to the point that they may turn down a job with higher pay and fewer benefits.
Implementing a strong benefits package might seem of secondary importance. However, in this article, we’d like to show you that when proper focus is given to creating and implementing a strong benefits package, it can be instrumental in elevating your business’s culture.
Read on to learn what an employee benefits package is, why it is so crucial, and how you can build one that will bring value to your business.
What is an Employee Benefits Package?
In its most simple form, an employee benefits package is any additional compensation that employees receive on top of their salary, commission, bonuses, etc.
Not all benefits are optional for an employer to provide. For example, it is mandatory that businesses of all sizes in the UK provide:
- Statutory annual leave entitlement
- Paternity and maternity Leave
- Statutory sick pay
- Workplace pension schemes
Any employer that doesn’t provide these mandatory benefits could face legal and financial ramifications. They would likely also see a massive hit to their reputation.
Then, there are non-mandatory benefits. Employers can choose to implement a whole host of different benefits on top of the mandatory ones. They can range from gym memberships to free meals and drinks. Generally, employers will choose benefits that align with their business’s own culture, values and financial situation. The end goal is to make employees’ lives easier and show them that they are valued.
Why is an Employee Benefits Package Important?
The importance of an employee benefits package is twofold. A great one will make a huge difference in the lives of both employers and employees.
A comprehensive benefits package will make an employee’s pay go further. This shows employees that their financial wellbeing is a priority and lets them know their time and work are valued.
We believe there is a great need for more focus on financial well-being. In a 2023 report titled “Health and Wellbeing at Work”, CIPD discovered that financial well-being is the most overlooked aspect of employee health. Considering the economic slump the nation finds itself in at the time of this article’s publication, it is likely that employees are relying on benefits packages now more than ever and will continue to do so in times of trouble.
These benefits ultimately increase staff morale. Being able to save money, more easily afford things that bring them joy, and access discounted healthcare means that employees will generally be healthier both physically & mentally and live more fulfilled lives. This translates to more energy and motivation in the workplace. Furthermore, knowing that their employers care and value their work can boost employees’ engagement.
(If you’d like to learn more about the importance of staff recognition, we have an article up about that too.)
In regards to employers, a strong employee benefit’s package can help you tackle the issue of employee retention, a problem that is widespread amongst businesses.
This occurs for various reasons, but many studies, for example Randstad’s on the impact of compensation and benefits on employee retention, have found that the key reason for staff moving between roles so quickly is to improve their salary and benefits.
Remember, even when a salary is great, a benefits package can mean the difference between top talent joining your team or choosing another business that offers a similar salary with better benefits, so increasing your salary and not putting focus on creating a benefits package may not always be the most effective solution!
By offering your staff a benefits package that improves their quality of life and takes their wellbeing into consideration, you’ll be showing them that your business is one that cares for its people and is one worth staying with.
Your employees’ feeling happier and more motivated in the workplace will naturally lead to more getting done, and therefore key targets should be hit and exceeded more often. Your staff’s happiness goes a long way towards contributing to your success!
How can I Go About Creating a Strong Employee Benefits Package?
Now that you have a good idea of what an employee benefits package is and why it’s so important for your business to have one, let’s get into how you can create a strong employee benefits package.
- Know your budget: The first thing you’re going to want to get clear on is your budget. It’s likely your budget will have to consider multiple factors, like how many employees you have and your industry. Be sure to remember that you may want to include your mandatory employee benefits in this budget. For maximum efficiency, you’ll also want to review this budget regularly and make adjustments where needed.
- Know yourself: Once you know what money you can put aside for your employee benefits, you can start to consider your own company’s values. You won’t have the funds to provide every benefit possible, so you’ll have to get specific. Do you value fun? Health? Financial security? This can help you get an idea of which benefits might work best for your company.
- Know your team: Have a good idea of what your company’s values are? Let’s find out what your team values next. Since these benefits will be for them, you’ll want to make sure that they will actually like and use them. This isn’t always easy, as everyone will value different things. If this is the case, an employee benefits platform like Benefits Cloud may be for you; sites like ours have many different offers that would suit a diverse range of people!
- Know the competition: This isn’t a suggestion to copy another company’s strategy; after all, each company will find that different things will work for them. However, it may be smart to find out which companies tend to have the highest retention rates and take a look at how they handle their employee benefits packages.
- Keep everyone in the know: You’ve created a comprehensive, amazing benefits package for your team. You’re excited for them to use these benefits and you’re sure they will love them, but… they seem uninterested. This is a real possibility if you don’t make everybody on your team aware that you’re bringing in new employee benefits!
Types of Benefits You Could Include
We hope you now have an idea of what actions you can take to create a strong employee benefits package.
However, if you’re finding that you’re struggling for inspiration or you’re starting from scratch and feeling a little overwhelmed, don’t lose hope! We have a few categories of employee benefits that you could consider:
Health and Wellbeing Benefits
To show your employees you care about their health, you could try:
- Dental insurance
- Vision insurance
- Free or discounted gym memberships
- Mental health support
Childcare and Family Benefits
Parents make up a large section of the workforce, and it’s no secret that building a successful and fulfilling career around children isn’t always the simplest endeavour. This is especially true when you consider the costs and practicalities of childcare.
From allowing parents to work from home when their children are sick to providing aid by paying nursery fees, helping out the members of your team that have children can relieve them of these particular worries.
Financial Benefits
As we mentioned before, providing a strong employee wellbeing package will itself help your team financially in various ways.
If you’d like to add even more in terms of financial support, however, you could consider:
- Free or discounted financial guidance
- Free or discounted financial education
- Employer-sponsored retirement plans
- Emergency financial assistance (payroll advances, an emergency savings account, etc)
Flexible Working
Offering flexible working where possible can be massively helpful to your staff. Cutting down on the time and money spent on commuting, allowing workers with disabilities or chronic health conditions to better manage them, and reducing stress levels are all major benefits.
By showing your staff that you trust them to work from home, you’ll likely build a stronger bond with them!